After the ECB left its policy unchanged, the president of the ECB Mario Draghi took the stage. At first, Draghi balanced things quite nicely. On one hand, growth and employment are rising, and Draghi took some credit for the long list of achievements. On the other hand, he expressed worries about underlying core inflation and stressed the need for ongoing accommodative monetary policy. There was no discussion of further tapering.
And then he answered a question about the removal of a phrase. The ECB dropped the line about “using all instruments”. He said that there is no longer a sense of urgency.
EUR/USD, which traded in a narrow range mostly around 1.0555, jumped above 1.06. Resistance awaits at 1.0640.
EUR/USD closes the press conference at 1.0595, about 40 pips above the level it began the event. This is below the 1.0615 peak.
Are the gains sustainable?
Draghi made an effort to remain balanced and also this statement was tentative. The extreme and unlikely scenarios are now even more unlikely. However, more support is needed for a longer period of time.
And while the ECB raised forecasts for 2017, acknowledging reality, they are not convinced about the future. Conditional on ECB support, headline inflation is not expected to top 2% in 2018 and 2019.
Is this a sell opportunity?
In any case, you can see how the event developed:
Follow the live video coverage as well as the live blog of the event that moves EUR/USD.
Drag live blog – as it happened
Live Coverage
Follow the live coverage with Valeria Bednarik, Mauricio Carrillo and myself:
Share
